Will the Mars and Wrigley Merger Bring Us Chocolate Gum?

Doublemint Gum Twins meet the M&M’s gang.

On April 28, Mars, the privately held maker of Snickers, Starbursts and Twix, said that it would buy Wrigley (WWY), the Chicago-based chewing gum company, for $23 billion, according to published reports. That means a lot of money is changing hands on Wall Street, but what does it mean for the candy lover on MainStreet?

Will the companies joining forces lead to the creation of a Willy Wonka-inspired everlasting gobstopper with a chocolate chewing gum center? Probably not. "Turning Mars [bars] into chewing gum would be a disaster,” says Rob Frankel, a brand expert and author of The Revenge of Brand X. (Not to mention that competitor Nestle owns the rights to the Willy Wonky Candy Company brand.)

However, some subtler collaboration could happen, eventually. The companies could “benefit from Wrigley products that were to rely on a quality chocolate ingredient,” says Frankel. That’s not all. “You have two different companies with their own research and development, and it could spawn more creativity,” says Mitch Corwin, equity analyst at Morningstar. Yum. Creativity and chocolate, we like it.

Here are some other ways the merger might matter to you:

AT THE CHECKOUT COUNTER

Hershey is the largest U.S. confectionary company, and the merging of Mars and Wrigley could harm its position, says Corwin. So, will rivals Hershey and rival candy company Cadbury now become one? That's unclear. “We believe the implications are an unqualified positive for Cadbury and are less clear for Hershey,” says Jonathan Feeney, a Wachovia Analyst. More importantly, will this merger mean cheaper Snickers bars come Halloween? Again, probably not. Although you may see more M&M’s and Big Red at eye level during your shopping trip. “Shelf space is the most fought over real estate,” says Frankel.

Parents shopping with candy-craving kiddos come up with your reason "Why Not" now before you reach the grocery check-out aisle. You've been warned!

IN YOUR STOCK PORTFOLIO

With Mars expected to acquire Wrigley in a six months to a year, the transaction has to be approved before investors are bought out. But for early investors of Wrigley’s the premium could be pretty sweet. (The stock's fair value estimate rose to $80 after the Mars cash offer, according to analyst reports. The stock is currently around $76.)

ON YOUR VACATION

Hershey Park and Wrigley Field are just two U.S. attractions that have drawn millions throughout their history. The 100-year-old year-old Hershey Park is a theme park based in Hershey, Pennsylvania. Wrigley Field is baseball stadium that is home to the Chicago Cubs in Illinois. Will Wrigley and Mars team up to create a super theme park? One with a chocolate fountain slide, and giant juicy fruit gum shaped mats to slide on? Maybe not. The two brands have “their own identity,” he says. The “two powerhouse” brands would not want the “sum of the parts to equal less than whole.”

Sigh. At least the candy lovers on MainStreet can dream.

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